Property & Construction Disputes.

Delay and disruption claims arise where one party's acts or omissions have caused the other to take longer or incur additional costs in completing the works. A contractor claiming for delay must typically show: a qualifying delay event under the contract; that the event caused delay to the completion date (critical path analysis is usually required); and the financial loss resulting from the delay — prolongation costs such as site overheads, extended preliminaries, and loss of productivity. An employer seeking to deduct liquidated damages for contractor delay must show the contractor was responsible and that the liquidated damages clause is valid. Delay claims are technically complex and almost always require the assistance of a delay analyst and a quantity surveyor to quantify the loss.

If a contractor abandons a project, the employer can treat the abandonment as a repudiatory breach of contract and accept it — terminating the contract and claiming damages for the additional cost of completing the works with a replacement contractor and any losses caused by the delay. If the contractor becomes insolvent, the employer's position depends on the contract terms: most standard form contracts have insolvency termination provisions. Following insolvency, the employer ranks as an unsecured creditor for any sums owed — recovery through insolvency proceedings is often limited. Practical steps include: securing the site; preserving any materials and plant on site; notifying performance bond providers if a bond was in place; and taking advice on novating subcontract or design appointments to ensure the project can continue.

Where a builder carries out defective work, the client has a claim for breach of contract — the builder must remedy the defects or compensate the client for the cost of remediation. Under the Consumer Rights Act 2015, work carried out for a consumer must be performed with reasonable care and skill; where it is not, the consumer has the right to require the trader to repeat the service or, where that is not possible, to a price reduction. For more significant defects, damages can include the cost of engaging another contractor to carry out remedial work. A structural defects warranty — such as NHBC Buildmark — may also provide a route to recovery for new build properties. Before pursuing any claim, defects should be documented thoroughly and the builder given a reasonable opportunity to remedy them.

A collateral warranty is a contract between a contractor, subcontractor, or professional consultant and a third party — such as a funder, purchaser, or tenant — who is not party to the main building contract. It gives the third party direct contractual rights against the warrantor, allowing them to claim for defects or other breaches without needing to rely on tort. Collateral warranties are important in construction disputes because they extend the network of parties who can bring claims and against whom claims can be brought. They are particularly significant in commercial property development, where funders and purchasers require them as a condition of their involvement. The Building Safety Act 2022 has also introduced new rights of action for building safety defects that may reduce reliance on collateral warranties in some circumstances.

A construction contract is any agreement under which one party carries out construction operations for another — it can be a formal JCT or NEC contract, a simple letter of instruction, or even an oral agreement. The Housing Grants, Construction and Regeneration Act 1996 (as amended) implies certain terms into most construction contracts, including the right to payment by instalments, the right to suspend for non-payment, and — crucially — the right to refer disputes to adjudication. Where there is no written contract, the Act's implied terms still apply to contracts that fall within its scope. Without a written contract, proving the agreed terms — price, scope, programme — becomes a matter of evidence, which is why written contracts, however simple, are always preferable.

A final account dispute arises when the parties to a construction contract disagree about the final sum payable on completion of the works — typically involving disputes about the value of variations, the proper assessment of the contract sum, deductions for defects, delay damages, or retention. Final account disputes are among the most common in construction and can involve significant sums. Resolution routes include: negotiation between the parties; adjudication under the Housing Grants Act, which provides a rapid binding decision; arbitration where the contract provides for it; or litigation in the Technology and Construction Court. The right to adjudicate applies at any time, making it the most frequently used route for final account disputes where negotiations have broken down.

A penalty clause is a contractual provision that imposes a disproportionate financial consequence on a party who breaches the contract — historically, courts would not enforce penalty clauses. The Supreme Court's decision in Cavendish Square Holding BV v Makdessi [2015] reformed the law: a clause is now a penalty only if it imposes a detriment out of all proportion to any legitimate interest the innocent party has in enforcing the obligation. Liquidated damages clauses — which specify a pre-agreed sum payable for each day of delay — are common in construction contracts and are generally enforceable provided they represent a genuine pre-estimate of loss or protect a legitimate commercial interest. Whether a particular clause is a penalty or enforceable liquidated damages is a question of construction and fact in each case.

A professional indemnity claim against a construction professional — such as an architect, structural engineer, or project manager — arises where their negligent design, advice, or supervision has caused financial loss. The claim must establish duty of care, breach of the standard expected of a competent professional in the relevant discipline, and causation of quantifiable loss. Construction professional negligence claims often arise in the context of building defects — where the question is whether the defect was caused by a design failure, a specification error, or inadequate supervision, rather than (or in addition to) contractor error. Expert evidence from a specialist in the relevant discipline is essential. Limitation periods apply — six years from the breach or three years from the date of knowledge — making early advice important.

A retention is a percentage of each interim payment — typically 3% to 5% — withheld by the employer during a construction project as security against defects. Half is usually released on practical completion; the remainder on the expiry of the defects liability period. If an employer wrongly withholds a retention — for example, by refusing to release it after the defects liability period has expired without good reason — the contractor can refer the dispute to adjudication or issue court proceedings to recover the sum owed. The retention regime has been the subject of significant reform proposals, and the Construction Industry Scheme has long-standing concerns about retention abuse. Contractors should ensure retention release dates are clearly set out in the contract and follow up promptly when they fall due.

Adjudication is a rapid, binding dispute resolution process available as of right under the Housing Grants, Construction and Regeneration Act 1996 to parties to most construction contracts. Either party can refer a dispute to an adjudicator at any time — the adjudicator must reach a decision within 28 days of referral, extendable to 42 days with the referring party's consent. The decision is temporarily binding — it must be complied with immediately, even if one party intends to challenge it later in arbitration or litigation. This 'pay now, argue later' principle makes adjudication one of the most powerful tools in construction disputes: it provides rapid cash flow relief and shifts the burden onto the losing party to pursue further proceedings if they disagree. Adjudication decisions are enforced by the Technology and Construction Court with minimal scrutiny of the merits.

The Technology and Construction Court (TCC) is a specialist court within the Business and Property Courts that deals with technically complex disputes — particularly those involving construction, engineering, computer technology, and professional negligence arising from those fields. It is the appropriate court for larger and more complex construction disputes that cannot be resolved through adjudication or where a party wishes to challenge an adjudicator's decision. The TCC also enforces adjudication decisions rapidly — applications for summary judgment to enforce an award are usually dealt with within weeks. Judges in the TCC have specialist expertise in construction matters and the court's procedures are designed to manage complex multi-party disputes efficiently. Most significant construction litigation in England and Wales is conducted in the TCC.

Property and construction disputes arise across a wide range of situations: defective work by contractors or subcontractors; disputes over payment — including final accounts, interim valuations, and retentions; delay and disruption claims; professional negligence by architects, engineers, or surveyors; disputes about the scope of work or variations to a contract; contractor insolvency leaving projects unfinished; disputes between landlords and tenants about repair obligations; and disagreements about planning, boundary, or title issues arising during or after development. These disputes range from relatively modest residential building disputes to complex multi-party commercial construction litigation involving large sums. The appropriate resolution route — adjudication, arbitration, mediation, or litigation — depends on the contract, the nature of the dispute, and the amount at stake.